No investor can go wrong by investing in the broader S&P 500 index each month, as over the long term, their capital will grow in line with the average economic growth of the United States. However, safety and low volatility come with a tradeoff, which is the opportunity for higher growth that is lost through this broad diversification.
Focusing on the business cycle can be a way to still retain low risk setups, but also taking an advantageous position through tapping into the industries and sectors of the economy that might deliver a higher growth rate than the overall S&P 500, which is where picking exchange-traded funds (ETFs) can be a profitable endeavor for investors.
